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On-Premise Spirits Sales Look Strong In 2013, With Cocktails Driving Growth

April 19, 2013

As the U.S. economy continues to rebound in fits and starts, consumers are again moving to the on-premise, where operators are seizing on the momentum of the cocktail segment to drive business.

“Flavors remain hot for both clear and brown spirits—and right now, brown spirits are particularly hot,” says Wayne Chaplin, president and COO of Southern Wine & Spirits, of trends driving on-premise consumption. Southern saw 10% growth in its on-premise whisk(e)y business last year, matching its off-premise performance, with Irish whiskey and Bourbon leading the way.

Overall, Chaplin says, Southern’s total on-premise sales last year were up by around 3%, with Resorts/Lodging up 5% and Bar/Nightclub up 2%.

According to research group Technomic, consumer spending on alcohol grew 4.3% in the on-premise last year. Spirits were up 6.1%, outpacing both beer (up 2.7%) and wine (up 5.2%). Technomic anticipates overall on-premise adult beverage sales to grow another 4% in 2013.

Cocktail sales have become so essential to on-premise operators that even wine-centric venues are now mixology-oriented. Maggiano’s Little Italy, the 44-unit Italian restaurant chain owned by Brinker International, retooled its beverage program in March with the introduction of a Handcrafted Classic Cocktails menu, a list of nine drinks all featuring fresh ingredients and juices.

“We’re seeing the elevation of the role of the bartender in the restaurant,” says Michael Breed, director of marketing for Maggiano’s. “The chef has always been the centerpiece—the one who comes out and speaks with the customers about the dish at the table. We want to elevate the bartender to this level.”

While most of Maggiano’s beverage sales still come from by-the-glass wine, Breed notes that its cocktails—especially The Sicilian, made with Herradura, Aperol, blood orange, lime, simple syrup and rhubarb bitters; and The Perfect G+T, made with Hendrick’s Gin, Fever-Tree Tonic and cucumber served over an oversized ice cube—are proving to be popular additions.

Giles Woodyer, vice president managing director on-premise at Bacardi USA, says current cocktail trends can be divided into what’s happening in the mainstream—where flavored spirits are still booming—and what’s happening in cutting-edge cocktail markets like New York, Portland and San Francisco, where mixologists are “championing simplicity, using three or four ingredients, so that base spirits are allowed to shine, and moving away from the seven- to eight-ingredient cocktails.”

The recovery of higher-end sales in the on-premise has boosted Grey Goose and Bombay Sapphire, Woodyer adds, with Grey Goose remaining the top brand in VIP bottle service.

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